On January 1, 20X1, Frances Corporation started doing business and the owners contributed $200,000 capital...
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On January 1, 20X1, Frances Corporation started doing business and the owners contributed $200,000 capital in cash. The company paid $24,000 to cover the rent for the office space for the 24-month period from January 1, 20X1, to December 31, 20X2. On March 1, 20X1, MSK Inc. entered into a consulting contract under which Frances Corporation promised to provide consulting to MSK Inc. In return, MSK promised to pay a fee of $150,000, which was to be paid in January 20X2. Frances fulfilled its contractual obligation during 20X1. On July 1, 20X1, Frances purchased office equipment for $100,000 cash. The equipment has an estimated useful life of five years and no salvage value. The equipment was immediately placed into use. Frances uses the straight-line method of depreciation. It records depreciation expense in proportion to the number of months usage. Through November 30, 20X1, the company had paid $66,000 to its employees for 11 months of salaries. Accrued salaries on December 31, 20X1, were $6,000. On December 31, 20X1, Norbert Corporation advanced $20,000 to Frances Corporation for consulting services to be provided during 20X2.
Prepare a balance sheet as of December 31, 20X1.
Why is my capital stock wrong?
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